July 26 (Bloomberg) -- British Sky Broadcasting Group Plc,
the U.K.’s largest pay-TV broadcaster, posted a full-year
operating profit that beat analyst estimates and said it will
buy back 500 million pounds ($774 million) of shares.

Earnings before interest, taxes, depreciation, amortization
and some items in the 12 months ended June 30 rose 12 percent to
1.57 billion pounds, the Isleworth, England-based company said
in a statement today. Analysts in a Bloomberg survey had
estimated earnings of 1.55 billion pounds. The stock gained as
much as 2.6 percent.

BSkyB, which relies on exclusive sports broadcasts to
retain and win subscribers, last month increased spending on
English Premier League soccer rights by 40 percent, agreeing to
pay 760 million pounds per season. The pay-TV company also today
announced the second share buyback since Rupert Murdoch’s News
Corp. abandoned a 7.8 billion-pound bid for the rest of BSkyB
following a phone-hacking scandal.

“It was less than clear that the company would announce a
further buyback program,” said JPMorgan Chase analyst Mark
O’Donnell. The second buyback was a ‘positive surprise’’ and may
bolster earnings per share by 5 percent, he said.

BSkyB said last July it would buy back 750 million pounds
in shares. With the new buyback, News Corp.’s existing holding
will remain unchanged.

Shareholder Returns

“This is a good way we can amplify returns to
shareholders,” Chief Executive Officer Jeremy Darroch said
today. For News Corp. “this is a good way they can support
us.”

The stock gained as much as 17.50 pence to 702.50 pence in
London today and was up 1.3 percent as of 8:09 a.m. The shares
have dropped 5.3 percent this year, while the British FTSE 100
benchmark index declined 1.3 percent.

“Given the economic headwinds it’s always going to be a
bit tougher” to increase net additions, Darroch said. “Our job
is not to fret too much. I don’t think its dramatically changed
but its hard to see any short-term improvements.”

Britain’s recession deepened in the second quarter, as the
economy shrank 0.7 percent, the most in more than three years.

BSkyB, with more than 10 million subscribers, has focused
on selling bundled packages that include Internet broadband,
high-definition TV services and telephone subscriptions.

The broadcaster is also bringing out its own Web-television
service, dubbed Now TV, as it faces increased competition from
Internet TV offerings. U.S. streaming-service Netflix Inc.
started offering movies and TV shows in January and Amazon.com
Inc.’s Lovefilm expanded its service in the same month.